Question

1) What are the Goals of the World Bank and the IMF? Why are some people upset and protesting about the World Bank and IMF?

2) Give the pros and cons of Flash Trading and Dark Pools. How and should the U.S. government regulate them?

3) Due to the potential Brexit vote, the British pound and Euro are both depreciating relative to the dollar, how does this impact exports and imports, AD and GDP? What should the Fed. due to respond?

Answer 1

The World Bank and IMF are largely aimed at reducing geopolitical risks amd maintaining financial stability and provide financial support to underdeveloped nations. However multiple lending to economies like Greece have led ro wide-spread criticisms because of its in ability to payback and stringent austerity measures as proposed.

Flash trading and dark pools ar ehighly useful for curbing excess volatility and making humongous profits as it is not accessible to public. However lack of governance, lack of issue resolution mechanism and absence kf transparency make it look illegitimate as downsides.

Since both pound and Euro are depreciating against US dollar the exports are widened to receive foreign exchange currency like US dollars an dimports are curbed to preventing outflow of euro and hence trade deficit plunges. Since exports pick up there is higher liquidity and disposable income in Euro region and US thus becomesnet importer which leads to stagnant incomes in US and hence consumption in US slowsdown leading to plunge in aggregate demand and thus real GDP. As results the Fed lowers the interest rates and CRR to keep injecting liquidity in market and stabilise US economy from stagnant growth